DowDuPont (NYSE:DWDP) cut its forecast for first-quarter sales on Thursday, citing the impact of U.S. Midwest floods on its agri business as well as weakness in its packaging and specialty plastics division.
Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and several other states, idling ethanol plants, slowing rail shipments of agricultural products and swamping storage bins holding grain from previous harvests.
The company said the floods have limited its ability to deliver products to customers, while delaying pre-season applications.
Sales from its agri business are expected to be down 4% to 6% and operating earnings before interest, tax, depreciation and amortization (EBITDA) are expected to be down by $125 million to $150 million, DowDuPont said.
Grains trader Archer Daniels Midland (NYSE:ADM) was also forced to lower its first-quarter profit forecast on Monday due to floods and a severe winter.
For the first quarter, DowDuPont now expects net sales to be down in the high single-digit percentage range. It had previously forecast sales to fall in the mid single-digit percentage range.
DowDuPont also forecast a $100-million reduction in its materials science division's operating EBITDA, compared with previous expectations, due to lower margins in packaging and specialty plastics globally.
DowDuPont, a holding company comprised of The Dow Chemical Company and DuPont, will release its first quarter results on May 2. Its shares opened Friday down $1.10, or 2.1%, to $51.62, while shares in Archer Daniels Midland eked up nine cents to $42.81
